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Trump Budget Would Cut Agency Key to Shale Boom

by Will Brackett

An agency instrumental to America’s surge in energy production would lose half its funding in President Donald Trump’s proposed federal budget.

The Energy Department’s Office of Fossil Energy, whose research helped push the U.S. closer to self-sufficiency, is slated for a 58 percent cut for next year, to $280 million. The shale innovations the office develops are available to any company that can use them, including industry giants that keep results of their own studies, but they’re most beneficial to independent drillers that might otherwise find it tough to compete with behemoths such as Exxon Mobil Corp. and its $1.06 billion annual research-and-development budget.

“What the federal government, at times, has done very well is they help get experiments run that many companies may not be able to afford on their own, or wouldn’t have the moxie to pull off,” said Greg Leveille, chief technology officer for ConocoPhillips, one of the country’s biggest producers.

Many in Congress, even Republicans who favor cutting programs, have balked at the cuts. Senate appropriators defended the Energy Department’s research program, citing the agency’s work on shale gas development.

The U.S. government has had a hand in virtually every major energy innovation in the past half century, from nuclear power to carbon capture. The shale revolution is a descendant of federal research, and agency dollars have supported the development of biofuels, flying wind turbines and the lithium ion batteries that power electric cars. Most of the research budget today is dedicated to nuclear and renewable energies. The share that focuses on oil and gas aims to reduce the environmental harm of fossil-fuel production, which can have the added benefit of boosting a company’s bottom line.

Read more of the story from Bloomberg here


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